A $40,000 asset was purchased and classiﬁed as a Class 10 asset for CCA purposes. If the CCA rate is 30%, calculate UCC for the end of year 1.

Question

Quizplus · Accepted Answer

The UCC (Undepreciated Capital Cost) at the end of year 1 is calculated by subtracting the CCA (Capital Cost Allowance) from the original cost. The CCA for year 1 is 30% of $40,000, which is $12,000. Therefore, the UCC is $40,000 - $12,000 = $28,000. However, due to the half-year rule, only half of the CCA is claimed in the first year, so the CCA is $6,000, making the UCC $40,000 - $6,000 = $34,000.

A $40,000 Asset Was Purchased and Classiﬁed as a Class